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What if I don't have enough financial aid to cover all of my expenses?
The purpose of financial aid is to assist students in funding their education. After all available aid has been offered to you, you may still find yourself short on covering all of your educational expenses. If this is the case, a few alternatives exist that may assist you.
Scholarships
Many scholarships exist that can help pay a portion of your expenses. Most scholarships are based upon academic merit, but there are many others available as well. Take some time to search the internet and other sources for scholarship information. Please note that you should NEVER pay for a scholarship search. There are hundreds of free search tools to help you.
Alternative Education Loans
After all of the federal loan options have been explored and exhausted, students can look into the Alternative Loan market. Unlike the federal loan programs, alternative loans are not regulated by the government. Each lender has its own set of application, credit, and co-signer requirements, and interest rates are variable, not fixed. The borrower is the student, but lenders may require a co-signer when there is limited student credit history. Generally, alternative student loan payments are deferred while the student is in school at least one-half time (with the interest on the loan accruing).
In choosing a lender, it’s always a good idea to start with a lender that you currently work with or you know has been in the student loan business for a significant amount of time. Be cautious of lenders whose names you do not recognize or those who offer you ‘teaser’ or introductory rates or prize incentives. Below are some questions you should ask when considering an alternative loan lender.
- What is my interest rate? Lenders will advertise ‘as low as’ rates but it’s important to know what your rate will be.
- How often will the interest rate change and how will I be notified?
- What fees will be charged (reducing the proceeds)?
- How often do you capitalize interest on the loan? Lenders who capitalize interest less frequently will save more money over time.
- Is there a prepayment penalty?
- Can I defer payments while in school or if the student has financial difficulty?
- What benefits or rate discounts are offered, and what conditions have to be met in order to obtain the benefits?
- Does the lender have any local presence (if that is important to you)?
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